Suspect we are close in price but still have a ways to go in time, perhaps even to next fib date cluster mid Feb which syncs with Doc's prediction.

Til then swing both ways is my game plan. Short the worst, dong the best and make money on both ends concurrently. Just like a u-shaped min/max thermometer. Each up/down market swing pushes the marker (profit) higher and higher on each side. Market direction? Who cares! The market can't figure out where it wants to go and neither can I.

I waited for the pullback as well and I still worry about a sharp sell-off. Since gold broke above $330, it generated a lot of interest. Many of the short-term sentiment indicators in the gold market are registering extremely bullish readings. That's usually a sign that the market is on the verge of a short-term drop. But my experience has been that as I have lightened up on the miners, hoping for a lower entry point, they've taken off instead and I've had to chase them.

But here's the beauty of the HUI and XAU. They are in a bull market and if you only stay in long enough you'll come out a winner. The metal itself is in the early stage of a major bull market, with many gold stocks acting very well. This is very clear when you look at the long-term monthly charts. This is a major upside reversal, not some flash in the pan. A mistake that most people make with gold is watching it day to day and being shaken out by all sorts of little wiggles. The way to make money in a major bull market is to buy and hold. Some of us like to buy upside breakouts, others, like to buy pullbacks to the EMA, but once aboard, you really have to hold on for the long haul.

I currently hold GG, GLG, MDG, GFI, and HMY. I will stay long and reweight them if one or two do much better than the others. I've found that to be a good strategy. You reweight overbought positions that have run up fast to other stocks that have lagged. Eventually the laggards catch up with the frontrunners and you reweight again.

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rog, I did a Google search today on "stock bond correlation." It turned up some interesting papers. The positive correlation between stock and bond prices which many of us thought was permanent existed from 1967 to 1998 ... the inflationary years.

Inflation (once recognized) hurts all paper assets, so stocks and bonds prosper or suffer together. Deflation (or the fear thereof) is a different story: poison for stocks, red meat for Treasury bonds. A decoupling occurs.

A telling proof is that the stock-bond correlation went negative in Japan in 1992, and has stayed there. The rest of the rich countries followed in 1998.

If this continues, then today's Treasury bloodbath and the pressure on Treasury auctions which you foresee should go hand-in-hand with the Bubble II rally ... at least till gold smokes up to $500, and inflation fears take over. Or if Bubble II dies young and gold plunges back to $250, then Treasurys get a second go in Depression II.

What am I saying? That the conventional wisdom that gold and stocks are inversely correlated was also a transient, Sixties to Nineties thing? Yes. Gold and stocks rallied together in 1933-34. And they're doing it again now. The HUI and the SPX are joined at the hip. Both crave pricing power for their product. A weak dollar helps, and may actually be bullish until dollar decline turns into headlong collapse.

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Agree with Soup - stocks are still generally overvalued, especially tech. Does that mean they will come down anytime soon? Maybe, maybe not.

I also believe that alot of dividend yielding utility and energy stocks are undervalued on a relative basis. Take a look at the move and volume in El Paso today(EP), still yields 10%, still speculative, but might be breaking out. Corporate bonds have been performing exceptionally well, especially in the energy sector. JMHO. From this point forward, I will ONLY listen to Bill Gross. Too bad it took me 3 years to figure that out. :cry:

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And thanks to Machine cranium and all who are willing to WAG on this dog.

We have been watching for the unraveling for some time but instead keep seeing bubble after bubble after bubble. Wonder if NCEN will see 33 again. Will BAC top 75? EBAY to new high in 03. It?s all good fun if you live through it.

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I'm always, always amazed not by the markets but by the participants in the MARKETS. A 1,000 point up move Mark-not a HOPE IN HELL! Go and look at the rallies we have had from the TOP-each rally has been more explosive-yes-but craps out quicker than the one that preceded it. That's why we have had 3 successive down years and will now have a 4th. I have often said in my postings "we are in the best of times" because the markets are still in the stair step down stage not the downhill sled ride to hell-but that is about to change- 9000+ or- should be all she wrote 940-955 SPX ditto by then everyone and their dog will be in and the sled ride begins. Having said that we don't have to go to 9000 or 955 we can technically crap out anytime on the way-Bernie Schaeffer in an editorial today predicted 6000-6500-shortly as have others with good track records. Every day the market goes up buried in the news is stuff like this-AOL to take charge of 10 Billion dollars due to AOL deterioration-Gm announces pensions underfunded by 19.2 Billion dollars-360 networks emerges from bankruptcy now primarily owned by JPM and others ( a bank derivative monster now forced thru bad loans to run companies-lovely) 360 networks announces 101 million dollar lawsuit against Nortel for alleged preferential transfers of cash and equipment by 360 to NT just prior to chapter 11. Edison International announces 35 Million dollar 4th 1/4 chge. That is only part of what happened today-the debt will NEVER be paid-Harrahs and Mirage and all of Vegas are hemmoraging money. Nope by Feb.7 the sled will be rolling. The Markets-I covered my SPX puts at the open for a decent profit and will re-institute my 100% short position as this beast runs up-the last TIME I was 100% short was just prior to the top-on GOLD-no hand wringing necessary just buy and hold (well said Pitbull) Trade Safe!